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US Mobile Phone Market - February 2011

US Mobile Phone Market

The fast-growing mobile phone market is characterized by constant change, driven by evolving consumer attitudes and usage patterns. Competition among smartphone platforms and manufacturers is fierce, and share position can shift dramatically within the course of a year (demonstrated by the rapid growth of Android). Success hinges on the ability to design products that anticipate how consumers will want to use their phones as new apps and functionalities are developed.

In this exclusive report, Mintel takes a look at trends in the market for mobile phones, as well as innovations and consumer attitudes that will drive growth in 2011.

Analysis and insights offered include:

£2,534.48

  • which new technologies will inspire upgrades in 2011
  • which demographics carry the most Android momentum
  • which distribution channels are stealing share from carrier stores
  • how manufacturer brands are positioning themselves for key demographics.

Insights are supported by exclusive Mintel consumer research, which delves into topics such as:

  • how much resistance to smartphone adoption still exists
  • which smartphone functionalities have become mainstream
  • which characteristics of BlackBerry, Android, and iPhone help them differentiate
  • what level of interest exists in 4G and video calling.

Scope and Themes


What you need to know


Definition


Sales data

Consumer survey data

Advertising

Abbreviations and terms


Abbreviations

Terms

Executive Summary


Smartphone sales account for nearly three-fourths of market


Smartphone adoption and regular replacers drive market growth


Groundbreaking technologies give consumers reason to upgrade


Tablet PCs offer alternative but hybrid products are unlikely


Major manufacturers vie for tech leadership in smartphones


Android leaps ahead of Apple and Microsoft


Innovations increase smartphone display, speed, and role as data center


Television ads reflect various differentiation strategies


Internet channel accounts for a third of mobile phone purchases


Smartphone adoption shows momentum as well as resistance


Wide range of smartphone uses show substantial adoption


Purchase considerations reveal platform differentiation


Varying consumer attitudes reflect platform weaknesses


Interest in video calling and 4G phones strongest among under-35s


Insights and Opportunities


Young parents deserve more attention from marketers


Thinking ahead to Boomers as a source of sales growth


Figure 1: U.S. population without smartphones, by age, 2011

BlackBerry and Microsoft must defend with stronger brand identities


Inspire Insights


Trend—Affection


Competitive Context


Tablet PCs show sales momentum but phone functionality unlikely


Figure 2: Smartphone and tablet PC ownership and intent to buy, November 2010

Market Size and Forecast


Growing importance of mobile technology renders market recession-proof


Sales and forecast of market


Figure 3: U.S. factory sales and forecast of mobile phones, at current prices, 2006-12

Figure 4: U.S. factory sales and forecast of mobile phones, at inflation-adjusted prices, 2006-12

Fan-chart forecast


Figure 5: Fan-chart forecast at 50-95% confidence levels, 2006-14

Market Drivers


Upgrades and replacements drive most purchases


Smartphone adoption

Figure 6: Mobile phone ownership and intent to buy, November 2010

Replacement cycle

Figure 7: Attitudes toward mobile phone replacement, by age, November 2010

Groundbreaking new functionalities drive new purchases and upgrades


4G speeds

Video calling

Larger screens

GPS services

Ownership driven by need for social connectivity


Figure 8: Attitudes toward social uses of mobile phones, by age, November 2010

Segment Performance


Smartphone growth more than compensates for standard phone decline


Sales by segment


Figure 9: U.S. factory sales of mobile phones, by type, 2008 and 2010

Figure 10: U.S. factory sales of mobile phones, by type, 2006-14

Segment Performance—Smartphones


Smartphone utility drives upgrades despite recession


Smartphone sales and forecast


Figure 11: U.S. factory sales and forecast of smartphones, at current prices, 2006-14

Figure 12: U.S. factory unit sales of smartphones, at current prices, 2006-10

Segment Performance—Standard Mobile Phones


Factory sales of standard phones shrink but unit sales remain dominant


Standard mobile phone sales and forecast


Figure 13: U.S. factory sales and forecast of standard mobile phones, at current prices, 2006-14

Figure 14: U.S. factory unit sales of standard mobile phones, at current prices, 2006-10

Leading Manufacturers


User share shifts toward leading smartphone manufacturers


Figure 15: User share of top mobile phone manufacturers, Dec 2009-Nov 2010

Top manufacturers vie for position in the new 4G smartphone market


Figure 16: Specifications of Android phones to be released in 2011, January 2011

Smartphone Platforms


Google leaps ahead as RIM and Microsoft tumble


Figure 17: User share of smartphone platforms, Dec 2009-Nov 2010

Apple and Android see highest market momentum


Figure 18: Penetration and desirability of smartphone platforms, November 2010

Apple leads among respondents 24-34 while Android nabs 18-24


Figure 19: Penetration and desirability of smartphone platforms, by age, November 2010

Apple to maintain lead among higher-earners


Figure 20: Penetration and desirability of smartphone platforms, by household income, November 2010

iPhone release on Verizon could boost Apple share


BlackBerry’s lead greatest among large families


Figure 21: Penetration and desirability of smartphone platforms, by presence of children, November 2010

Windows 7 launch makes little impact on top three


Innovation and Innovators


Smartphone becomes modular control center


Oxygen Audio turns smartphone into car stereo

Multi-core processors hit the market in 2011


Displays continue to improve in resolution and brightness


Marketing Strategies


Television advertising


Apple


Figure 22: Apple iPhone 4—Grandfather Video Call, television ad, July 2010

BlackBerry


Figure 23: BlackBerry Style—Urban professions, television ad, November 2010

Motorola (Android)


Figure 24: Motorola Droid Pro—Work phone, television ad, November 2010

Samsung (Android)


Figure 25: Samsung Galaxy S—Avatar on the phone, television ad, July 2010

LG (Android)


Figure 26: LG Vortex—Restoring carousel, television ad, November 2010

HTC (Android)


Figure 27: HTC HD2—Morales family, television ad, October 2010

T-Mobile (Android)


Figure 28: T-Mobile MyTouch 4G—Video call comparison, television ad, December 2010

Online advertising


Inventive social media campaigns complement traditional advertising


Retail Distribution


Bricks-and-mortar loses ground to the internet


Figure 29: Share of mobile phone purchases, by type of distribution channel, 2009 and 2010

National chains and web-only retailers gain share


Walmart

Best Buy

Web-only retailers

Figure 30: Share of mobile phone purchases, by distribution channel/retailer, 2009 and 2010

Ownership and Intent to Buy


Smartphone penetration poised to for significant growth


Figure 31: Mobile phone ownership and intent to buy, November 2010

Boomers show greater resistance to smartphone ownership


Figure 32: Smartphone ownership and intent to buy, by age, November 2010

Smartphones owned by more than half of highest-earners


Figure 33: Smartphone ownership and intent to buy, by household income, November 2010

Decision Factors


Smartphone buyers look for functionality over form


Figure 34: Considerations in the phone purchase decision, November 2010

Purchase considerations reflect differentiation among platforms


Figure 35: Considerations in the phone purchase decision, by smartphone platform, November 2010

Smartphone Apps and Activities


Wide range of smartphone uses show substantial adoption


Figure 36: Usage of smartphone functionalities, November 2010

Women more likely to use smartphone for social networking


Figure 37: Usage of smartphone functionalities, by gender, November 2010

Under-35s most active smartphone users


Figure 38: Usage of smartphone functionalities, by age, November 2010

iPhone users more likely to use mobile commerce


Figure 39: Usage of smartphone functionalities, by smartphone platform, November 2010

Only a quarter of downloaded apps are paid


Figure 40: Number of apps downloaded and paid for, by key demographics, November 2010

Attitudes Toward Mobile Phones


A quarter of cell phone owners replace every other year


Figure 41: Attitudes toward mobile phones, November 2010

Under-45s more likely to replace


Figure 42: Attitudes toward mobile phones, by age, November 2010

Smartphone platforms offer different strengths


Figure 43: Attitudes toward mobile phones, by smartphone platform, November 2010

Other Attitudes Toward Mobile Phones


Interest in video calling strongest among under-35s


Figure 44: Attitudes toward video calling, by age, November 2010

Resistance to mobile internet usage strongest over age 45


Figure 45: Attitudes toward mobile internet, by age, November 2010

Half of parents see mobile phones as good gifts for teens


Figure 46: Attitudes toward mobile phones for kids, by children in the household, November 2010

Attitudes Toward Next-Generation Data Networks


4G phones desired by a quarter of 25-34 year olds and high-earners


Figure 47: Attitudes toward next generation data networks, November 2010

Impact of Race and Hispanic Origin


Asian respondents more likely own smartphones and use certain features


Figure 48: Smartphone ownership and intent to buy, by race and Hispanic origin, November 2010

Figure 49: Usage of smartphone functionalities, by race and Hispanic origin, November 2010

Asian respondents less likely to replace on a regular basis


Figure 50: Attitudes toward mobile phones, by race and Hispanic origin, November 2010

Figure 51: Attitudes toward video calling, by race and Hispanic origin, November 2010

Cluster Analysis


Simplists


Demographics

Characteristics

Opportunity

Enthusiasts


Demographics

Characteristics

Opportunity

Good-enoughs


Demographics

Characteristics

Opportunity

Cluster characteristics


Figure 52: Cell phone clusters, November 2010

Figure 53: Attitudes toward mobile phones, by cell phone cluster, November 2010

Figure 54: Attitudes toward video calling, by cell phone cluster, November 2010

Figure 55: Attitudes toward mobile phones for kids, by cell phone cluster, November 2010

Figure 56: Considerations in the purchase decision, by cell phone cluster, November 2010

Figure 57: Attitudes toward mobile internet, by cell phone cluster, November 2010

Figure 58: Attitudes toward next generation data networks, by cell phone cluster, November 2010

Cluster demographics


Figure 59: Cell phone clusters, by gender, November 2010

Figure 60: Cell phone clusters, by age, November 2010

Figure 61: Cell phone clusters, by household income, November 2010

Figure 62: Cell phone clusters, by race and Hispanic origin, November 2010

Cluster methodology


Custom Consumer Groups


Dads constitute distinct subsegment of younger males


Smartphone ownership

Figure 63: Smartphone ownership and intent to buy, by gender and children in the household, November 2010

Smartphone platforms

Figure 64: Penetration and desirability of smartphone platforms, by gender and children in the household, November 2010

Usage of smartphone functionalities

Figure 65: Usage of smartphone functionalities, by gender and children in the household, November 2010

Attitudes toward mobile phones

Figure 66: Attitudes toward mobile phones, by gender and children in the household, November 2010

Figure 67: Other attitudes toward mobile phones, by gender and children in the household, November 2010

App downloading

Figure 68: Attitudes toward mobile phones, by gender and children in the household, November 2010

Appendix—Other Useful Consumer Tables


By gender


Figure 69: Considerations in the phone purchase decision, by gender, November 2010

Figure 70: Attitudes toward video calling, by gender, November 2010

Figure 71: Attitudes toward next generation data networks, by gender, November 2010

Figure 72: Penetration and desirability of smartphone platforms, by gender, November 2010

By household income


Figure 73: Attitudes toward next generation data networks, by household income, November 2010

Appendix—Trade Associations


  • Adobe Systems Incorporated
  • Apple, Inc
  • CDMA Development Group (CDG)
  • Cellular Telecommunications and Internet Association (CTIA)
  • Consumer Electronics Association
  • Craigslist
  • Dell Inc.
  • Electronic Industries Alliance
  • Enterprise Wireless Alliance (EWA)
  • Foursquare
  • Garmin International Inc.
  • Google, Inc.
  • GSM Association (GSMA)
  • HTC
  • LG Electronics Inc (USA)
  • Microsoft Corporation
  • Microsoft USA
  • Motorola Mobility Holdings
  • National Telecommunications and Information Association (NTIA)
  • Research In Motion Limited
  • Rural Cellular Association (RCA)
  • Samsung Electronics (USA)
  • Sony Corporation of America
  • T-Mobile USA
  • Telecommunications Industry Association (TIA)
  • The Carphone Warehouse Ltd
  • Twitter, Inc.
  • U.S. Bureau of the Census
  • US Department of Commerce
  • Verizon Communications Inc.
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